Is Terrorism Facilitated By Slumbering CBSL & New Foreign Exchange Act?
Amrit Muttukumaru
Sri Lanka is doing its damnedest to prepare a fertile ground for terrorism by (i) making minorities particularly Tamils and Muslims feel insecure by being treated as inferior to the majority Sinhala-Buddhists who comprise 70% of the population (ii) giving hegemony through constitutional measures and tacit government consent to Sinhala – Buddhists (iii) giving Buddhist clergy undue importance in matters of governance (iv) minorities particularly Muslims being subject to hate speech, violence and economic isolation instigated with impunity by extremists (v) nefarious activities of Sinhala-Buddhist and Muslim extremists not being stopped in their tracks due to reasons of vote bank politics by both major parties – SLPP and UNP (vi) although the long-drawn armed conflict with the LTTE came to a controversial bloody end in 2009 in the absence of credible accountability, the root causes leading to the conflict have still not been adequately addressed (vii) Reconciliation issues continue to fester.
Terrorism is facilitated by money laundering and the trade in illicit drugs being made easier (i) by the new Foreign Exchange Act No. 12 of 2017 effective from 20 November 2017 which repealed the Exchange Control Act No. 24 of 1953 (ii) corruption in high places (iii) nexus between those dealing in money laundering and illicit drugs with key sections of the political leadership, intelligence agencies, law enforcement agencies and financial regulatory agencies.
It has been plausibly argued that the new Foreign Exchange Act No. 12 of 2017 has the potential to encourage and legitimize money laundering.
A precursor to this dangerous Foreign Exchange Act is the ‘invitation’ issued by then Finance Minister Ravi Karunanayake through India’s prestigious publication ‘The Hindu’ of 5 October 2015 to “Sri Lankans and Indians who had to take back their deposits from banks in Switzerland to place their funds in Sri Lanka”. He had further assured that “No questions would be asked”!
In the context of the Act inter alia stating “The Central Bank shall as the agent of the Government, be responsible for implementing the provisions of this Act” one would have expected CBSL Governor Dr. Indrajit Coomaraswamy under whose tenure the new Act became effective to have at the very least publicly cautioned the government against the enactment of such an Act. Not only has he not done so but more reprehensibly he has the audacity to cite this dangerous Act to justify CBSL inactionon Sri Lankans named in the ‘Panama Papers’:
“The time period prescribed by the Foreign Exchange Act No. 12 of 2017 to conclude investigations under ECA expired on 19.05.2018 as stipulated in the Foreign Exchange Act No 12 of 2017. These investigations also lapsed on that date.”
On CBSL’s inaction on the Sri Lankan names in the ‘Panama Papers’ he has even cast aspersions on the credibility of the ‘International Consortium of Investigative Journalists’ by stating:
“After conducting the investigation, no information was revealed on investments as published by ICIJ.”
A name included in the ‘Panama Papers’ is an erstwhile colleague of CBSL Governor Coomaraswamy on the Director Board of JKH, arguably the country’s most diversified conglomerate with top tier market capitalization.
The UPSHOT of all this is that in the aftermath of the horrific Easter Sunday carnage, it is reported that security forces have unearthed “assets worth Rs 7 billion” attributed to suspects belonging to the National Thowheed Jamath (NTJ) said to be mainly responsible for the carnage.
Hub for Illicit Drugs?
Frequent detections of large hauls of heroin, cocaine and other illicit drugs which most likely are the tip of the iceberg would suggest that Sri Lanka has become a regional hub for the trade in illicit drugs in the Asian region. Such an occurrence is only possible under enabling conditions which include lax laws which facilitate money laundering/smuggling and the nexus between sections of the political leadership and bureaucracy with key players in the trade in illicit drugs. Does not the Reuters report “Sri Lanka is becoming a hub for cocaine as it is a risk-free location with less legal restrictions” confirm this position?
The link between money laundering, illicit drugs and funding of terrorism does not require elaboration.
It is reported that a high profile Sri Lankan arrested in Dubai this year for his alleged involvement in the illicit drugs trade has allegedly deposited as much as “Rs.10 billion in 23 bank accounts” in Sri Lanka and Dubai. Even if half this sum was deposited in Sri Lankan banks, does it not indicate that the CBSL has been in “deep slumber” in this respect too? One could only speculate as to how many other cases not yet in the public domain have escaped the notice of the CBSL?
Questionable FDIs
It is becoming apparent that for the most part Sri Lanka is only able to attract FDIs mired in controversy. The latest is the “$ 3.85 billion investment for an oil refinery in Hambantota”. One wonders whether this is a replay of the much hyped 2017 Volkswagen vehicle assembly plant in Kuliyapitiya which turned out to be a hoax. Those who hyped the Volkswagen assembly plant are largely the same persons now hyping the purported oil refinery in Hambantota. There was even a “ground breaking ceremony” for the Volkswagen plant.
Even the earlier 2016 $75 million tyre manufacturing plant in Horana is mired in controversy due to its promoter’s alleged involvement in controversial business dealings under the Rajapaksa administration. This case brings into focus the cosy relationship between competing politicians and the raison d’être why competing administrations are reluctant to hold wrongdoers accountable.
EAP Group Sale
The CBSL has failed to disclose whether its claimed ‘due diligence’ in regard to the sale of EAP Group companies has considered the damning allegations in the news report in ‘The Sunday Times’ of 3 June 2018 “Purchase of Edirisinghe Group: Investors in a labyrinth of multiple companies”?
